Your Cloudflare API Key is found in the My Account section, linked from the top right of the Cloudflare dashboard.

One limit: if you have multiple A records for the hostname you are updating, DNS-O-Matic will update the first record found, not others. (For dynamic DNS, multiple A records for a single hostname is unlikely.) One possible workaround would be to change additional records to CNAME records pointing to the original A record as done in the example records above.